SBI Holdings is making yet another significant foray into the cryptocurrency market. One of its units has set the ball rolling towards the emergence of a cryptocurrency derivatives trading market. If successful, this move will be a welcome development for virtual currency enthusiasts who yearn for greater liquidity and diverse trading options.

SBI Paving the Way for Cryptocurrency-based Derivatives Market

SBI Crypto Investment, a subsidiary of SBI Holdings yesterday (July 30, 2018) purchased a 12 percent stake in Clear Markets, an electronic trading company. Though details of the deal haven’t been published as at press time, the deal is reportedly worth $9 million (1 billion yen).

Clear Markets, based in Charlotte, North Carolina in the United States, deals in developing and operating electronic marketplaces as well as trading technologies. By investing in the company, SBI Crypto is hoping to create a derivatives trading platform, which should attract institutional investors into the market.

Price Volatility is Anathema to Institutional Investors

There is no denying the fact that virtual currencies are among one of the most exciting asset classes in the current market. However, their volatility serves as a significant deterrent against widespread adoption. In June and July 2018, Bitcoin declined 30 percent and gained another 30 percent.

With the ubiquitous wild price swings in the market, the creation of a cryptocurrency-based derivatives market seems to be a given. However, such a trading arena remains mostly undeveloped, leaving not enough avenues for big-money investors to hedge their risk. However, SBI in tandem with Clear Markets might be able to create a platform that allows family offices, hedge funds, and other big-time investors to trade virtual currency instruments comfortably.

SBI Betting Big on Cryptocurrency

The Tokyo-based financial services company is making significant investments in the cryptocurrency space with stakes in Bitflyer and CoolBitX. The former is a prominent cryptocurrency exchange platform while the latter is a wallet developer. Apart from a stake in Bitflyer, SBI also owns a cryptocurrency exchange platform – SBI Virtual Currencies.

Last week, Lancium Technologies announced an equity investment from SBI Holdings. Lancium is a data center and distributed computing company based in Canada. SBI plans to use its stake in the company to vastly improve the energy efficiency of its Bitcoin Cash mining operations. Lancium provides renewable energy to virtual currency mining facilities.

What are your views on the proposed SBI cryptocurrency derivatives market? Let us know in the comment section below.

Tech investor and entrepreneur Kin-Wai Lau believes that Bitcoin is riding another wave of enthusiasm. Speaking to CNBC, the Fatfish Internet Group CEO talked about the current state of the market, the BTC ETF saga, as well as the probable end-of-year price for the asset. According to Lau, Bitcoin and indeed the cryptocurrency market is experiencing a second wave rally. Lau also the described the wave as being “strong,” with lots of market interest and an increase in trading volume.

The Fatfish Internet Group CEO identified increased adoption and the influx of institutional money as major reasons for the market resurgence. According to Lau, market volume has increased significantly since price dipped to a new 2018 low in mid to late-June.

Bitcoin ETF possibility on the Horizon?

Lau also spoke about the recent decision by the United States Securities and Exchange Commission (SEC) to reject the Winklevoss twins’ Bitcoin ETF application. When asked about the possibility of an SEC-approved BTC ETF, Lau said:

I think it is pretty much a matter of time before the SEC approves an ETF. It is a matter of which organization is able to come up with appropriate tools for surveillance, monitoring, and the ability to create liquidity.

Apart from the availability of these tools, Lau also believes that a degree of market readiness is required to instigate the rollout of BTC ETFs. Before rejecting the Winklevoss BTC ETF, the SEC postponed its decision on another filing made by Direxion Investment.

Stabilizing the Bitcoin Market

On the subject of price volatility, Lau maintained that adoption was the principal driving force for market demand, which directly affects the asset price. On July 19, 2018, an influx of Chinese money moved the price upward. Affluent Chinese citizens looking to adopt Bitcoin as a haven for their wealth triggered an upward price movement.

As for an expert price prediction, Lau identified the $10,000 to $15,000 price milestones as a reasonable target for BTC’s end of year price. The Fatfish CEO said that there was a consensus among many experts on this price range. Lau also believed that with Bitcoin being used in more countries and the emergence of market regulations, price stability could be achieved for the top-ranked cryptocurrency.

Do you think Bitcoin is on the cusp of another price rally? Let us know in the comment section below.

Billionaire investor, Bill Miller believes Bitcoin is the cream of the crop as far as cryptocurrencies are concerned. The founder and chief investment officer (CIO) of Miller Value Partners also thinks that the top-ranked cryptocurrency is similar to gold.

Bitcoin is an ‘Interesting Technological Experiment’

In a recent Bloomberg interview, the self-proclaimed ‘Bitcoin observer’ revealed that he is a Bitcoin investor both personally and as part of a partnership portfolio. He recognized the nascent nature of the market, declaring that no one knows how the asset will end up. Regarding his views of the asset itself, Miller said:

I think that it’s an interesting technological experiment. Every day that it doesn’t blow up or get regulated to zero, what’s going to happen is that more money flows into the ecosystem.

Many market experts have repeatedly said that the entry of institutional money is the next significant phase in the evolution of the cryptocurrency market. However, the entry of these big-money players is contingent on the emergence of robust custody tools as well as clear-cut regulations in the market.

Most Cryptocurrencies are Worthless

When asked about whether his stance on Bitcoin extended to other cryptocurrencies, Miller said:

Most of them [cryptocurrencies] are probably worthless. Bitcoin is the most stable of the currencies. I think it has the greatest probability of being successful. There are others that people like, but that’s the only one I’m interested in.

Earlier in the month, another billionaire investor, Marc Lasry of Avenue Capital Group, said that Bitcoin is the virtual currency that will attract the most investors.

Bitcoin is a Lot Like Gold

Concerning the appropriate classification for Bitcoin, Miller said that he sees the top-ranked cryptocurrency as a non-correlated asset that is most similar to gold. However, he stressed that BTC held some certain advantages over the precious metal, chief of which are its ease of transfer and ability to function as a medium of exchange.

Despite these advantages, Miller believes that BTC isn’t an yet an efficient payment system or a viable currency. Enthusiasts like Square CEO, Jack Dorsey, and Apple co-founder, Steve Wozniak believe BTC can be the single global currency within the next decade.

Miller also predicted that if Bitcoin was able to attain a third of the total market value of gold, then institutions like banks might become more interested in the asset. The current BTC market capitalization stands at $140 billion which is 47 percent of the total cryptocurrency market.

Do you agree that Bitcoin is the most stable cryptocurrency? Let us know in the comment section below.

Concerning human psychology, Pompliano identified the palpable buzz and excitement in the market once any positive price movement occurs — as we’ve seen this week. He also said that people generally tend to like round figures, thus leading to a positive push between every thousand-dollar value.

With ETFs, Pompliano expressed doubts about an approval coming in 2018. However, the possibility of an ETF is enough to catalyze positive sentiments in the market. Thus, holders are less likely to sell in the hope of a significant price rally. (Yesterday, the SEC rejected the Winklevoss’ ETF application.)

As for institutional investors, Pompliano reports that they are beginning to dip their toes in the water. Earlier in the month, Barry Silbert of Digital Currency Group (DCG) revealed that the principals themselves have been trading BTC for a while. However, the lack of custodial tools and clear-cut regulations have kept them from fully to committing hedge fund trading capital into the market.

DMI Supports Price Rally Prediction

According to the Bitcoin Directional Movement Index (DMI), the recent price rally is nowhere near finished.

The DMI works by showing the degree of divergence between positive and negative DMI as an indication of an asset’s price trend, which is expressed as an Average Directional Index (ADX).

Presently, the ADX for BTC is almost 25 — which is a positive sign for the bulls.

A lower ADX signifies an imminent intersection of the positive and negative DMI, which frequently results in a price decrease. The last intersection of both DMIs occurred in May, and by the end of June, the top-ranked cryptocurrency had declined by more than 30 percent.

The Continuing Trend of Exponential Annual Price Increase

For Morgan Creek CEO Mark Yusko, Bitcoin will still be going strong, even six years from now.

In a tweet from April 2018, Yusko provided a rolling forecast which put the price of Bitcoin at $500,000 by the end of 2024.

For Yusko, the parabolic nature of Bitcoin’s price history means that its price keeps increasing with every year. Explaining further, Yusko says:

I don’t think you need a big event, and you’ve seen it in the past couple of weeks, right? As soon as the price starts to run. Those people that have been waiting on the sidelines to make sure that the bear market is over are ready to jump in, and then once it actually starts moving, then it starts moving fast, and that’s when you get those parabolic moves.

Bitcoin’s logarithmic price growth is well established, and Yusko references it in his defense of the $500,000 price forecast.

The Morgan Creek chief says the company also developed a model to estimate the actual value of the Bitcoin network. According to Yusko, this value is based on the hash power of the network, trading volume, and the number of participants.

Do you agree with these Bitcoin price projections? Let us know in the comment section below.

Image courtesy of Twitter (@APompliano and @MarkYusko), Bloomberg, and CoinMarketCap.com.

Iran might soon take a page out of Venezuela’s playbook by launching its own state-issued cryptocurrency. The move is occasioned by the fact that the country is set to come under renewed economic sanctions from the United States.

Local Companies and the CBI Collaborating to Create a National Cryptocurrency

According to local media sources, the country’s apex bank, as well as numerous Iranian companies, are putting modalities in place to create a national cryptocurrency. Commenting on the plans, Alireza Daliri, a senior official of the Directorate for Scientific and Technological Affairs of the Presidential Office said:

We are trying to prepare the grounds to use a domestic digital currency in the country.

The plans to create a state-owned cryptocurrency come at a time when Iran’s economy is in the midst of a death spiral. The country’s fiat currency, the rial, has undergone serious devaluation. Even after the April rate unification, the currency has continued to be in free fall.

Looming US Sanctions

The state-issued cryptocurrency initiative in Iran isn’t exactly a new development. Such a move had previously been considered by the government right after it became clear that the current US President was not a fan of the 2015 Obama-era nuclear arrangement.

However, with the return of US sanctions imminent, the country seems to be accelerating its timeline. Speaking about the importance of a national crypto for Iran, Dalir said:

This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions.

If the statements coming out of Washington are to be believed, then the new US sanctions on Iran will be more severe than previous ones. The sanctions are expected to come into effect in August 2018.

Earlier in the year, Venezuela launched the petro, another state-issued cryptocurrency backed by the country’s natural resources including crude oil. Like Iran, Venezuela is also at the receiving end of crippling economic sanctions from the United States.

Government officials in both countries believe that a national cryptocurrency provides both their countries with the ability to circumvent US sanctions. Cryptocurrencies provide a framework for borderless transactions far out of the reach of mainstream financial regulators.

What are your views on Iran’s plans to launch a national cryptocurrency? Let us know in the comment section below.

A couple of experts have recently provided compelling evidence that shows that the Asian market had a prominent role to play in the recent Bitcoin price surge. Also, the current economic standoff between the United States and China is positively enhancing Bitcoin’s pedigree as a hedge against economic uncertainties.

The Return of the Far East Bitcoin Bulls

In the wake of the recent Bitcoin price surge, many analysts have tried to come up with a reasonable explanation to explain the price movement. Some experts lean towards a short squeeze. Others believe that rumors of an impending positive BTC ETF decision from the SEC drove the market hype.

However, two analysts; Mati Greenspan of eToro and Clem Chambers of ADVFN, believe that a trading volume spike in the Asian market caused the BTC price rally. In a series of tweets, Greenspan, a senior analyst at eToro highlighted an increase in volume in both Japanese and Korean markets at the time of Bitcoin price surge above $8,000.

The surge above $8,000 was definitely led by East Asia. Take a look at bitcoin volumes in Japanese Yen and Korean Won at the time of the surge (13:30 – 15:00 on the chart).

In contrast, USD volumes had only a small spike and USDT (tether) remained constant through the movement. pic.twitter.com/fHdD8gRTTL

Perhaps even more profound is the fact that the trading volume in the American for that same volume remained reasonably constant. The effect of rising market enthusiasm in the Asian market also played a prominent role in the bull rally of late 2017 which saw Bitcoin almost eclipse the $20,000 mark.

Japanese traders know what’s up!

Earlier this week Japan’s bond yields (blue line) had a massive spike on speculation that the Bank of Japan might take action. Bitcoin (green) has been flying ever since.

Trade War and Currency Devaluation

For Clem Chambers, the CEO of ADVFN, the July 19 price BTC price surge was occasioned by wealthy Chinese scrambling to secure their money in Bitcoin in preparation for the impending currency devaluation. China’s continuing trade standoff with the United States and the decision to devalue its currency might enable the current price surge to hold.

If the trade wars go into meltdown, then bitcoin will ‘moon’ because huge amounts of Chinese currency will be swapped for BTC as the yuan-denominated super-rich move to be hedged from the wealth privations of devaluation. Bitcoin, not gold, is and will be the asset they will run to first.

The situation in China throws up another interesting angle for the emerging Bitcoin narrative. Many experts have likened top-ranked cryptocurrency to gold. The present apparent willingness of affluent Chinese to save their wealth in the BTC might be a testament to BTC’s status as ‘digital gold.’

Do you think rising trading volume in Asia caused the recent Bitcoin price spike? Is BTC better than gold as a hedge against uncertain market economic conditions? Keep the conversation going in the comment section below.

The United States Securities and Exchange Commission (SEC) has postponed its decision on the Direxion Bitcoin exchange-traded fund (ETF) filing until September 2018. The SEC is yet to approve any of the Bitcoin ETF applications it has received despite the sustained clamor from various stakeholders.

SEC Delays Bitcoin ETF Decision Until September

Arca Inc., submitted a rule change filing to the SEC in January 2018 seeking approval to list and trade shares of five Direxion BTC ETFs. Direxion Asset Management LLC announced plans to list their Bitcoin ETFs on Intercontinental Exchange Inc’s NYSE Arca pending the approval of the SEC.

News of the postponement was contained in a U.S. Government Publishing Office (GPO) post released on today (July 24, 2018). According to the post:

The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change.

The Justification for the Delay

The SEC is mandated by law to issue a decision no later than 180 days after it publishes the ETF filing notice which in this case was on January 24, 2018. Thus, the Commission should have given its approval or disapproval on or before July 23, 2018. However, there is a provision in the rule book which states that:

The Commission may extend the period for issuing an order approving or disapproving the proposed rule change, however, by not more than 60 days if the Commission determines that a longer period is appropriate and publishes the reasons for such determination.

Thus, the SEC has fixed September 21, 2018 (60 days from July 23, 2018) as the new date when it would approve or reject the Bitcoin ETF filing. According to the SEC, only two comments had been by Commission concerning the ETF filing.

VanEck Makes a Case for Bitcoin ETFs

While the SEC continues to remain reticent on approving BTC ETFs, investment management firm, VanEck, continues to make a case for their approval. In a recent letter to the Commission, the company responded to questions posed by the SEC about BTC ETFs. VanEck in collaboration with Solid X has a pending BTC ETF filing with the SEC.

Do you think the SEC will deliver a positive decision on any of these Bitcoin ETF filings? What are your thoughts on the merits of Bitcoin ETFs? Keep the conversation going in the comment section below.

HashFlare, a cryptocurrency cloud mining services, has shut down its Bitcoin mining service. The platform also terminated all related BTC mining contracts citing lack of profitability in operation. The price of the Bitcoin, the top-ranked cryptocurrency has struggled throughout 2018, declining by more than 60 percent since the start of the year.

Bitcoin Mining Payouts Lower than Maintenance Fees

In a statement on the company’s Facebook page, HashFlare announced its decision to terminate its BTC mining operation. A portion of the statement reads:

We have made every possible effort in order to resolve the problem that has arisen – for instance, we have considered a variety of technical solutions, which would have allowed us to lower expenses related to maintenance and electricity. However, due to the general instability of the market, the actions we have taken could not significantly influence the current situation.

According to HashFlare, payouts to users have been lower than maintenance fees for 28 consecutive days. Thus, the platform had no option but to terminate the service. This move was based on a clause in the platform’s Terms of Service.

HashFlare did, however, state that they were open to resuming the service if and when the price of Bitcoin stabilizes. In April, analysts at Morgan Stanley stated that Bitcoin miners would operate at a loss if BTC price dropped below $8,600. BTC last traded above $8,600 in mid-May 2018. Presently, Bitcoin is in the midst of a mini-resurgence, gaining 17 percent in the last seven days.

Restrictions on Withdrawals Causes Uproar

Before announcing the termination of its Bitcoin mining contract, HashFlare introduced new know-your-customer (KYC) and anti-money laundering (AML) protocols that restrict the ability of unverified customers to withdraw their funds. The proximity of the rules change to the mining contract cancellation hasn’t gone down well with many of its customers. As a consequence, many users have their funds trapped in the system.

Apart from Bitcoin, HashFlare also operates cloud mining contracts on other cryptocurrencies like Litecoin and Ethereum. At the time of writing this article, the company hasn’t announced any termination of the mining contracts of these other virtual coins.

What are your views on the HashFlare BTC mining shutdown? Do you think this latest news will give Bitmain a more significant stake in the Bitcoin network hashrate? Let us know your thoughts in the comment section below.

Coinbase, the popular US-baed cryptocurrency exchange platform, has formed a political action committee (PAC) ahead of the United States midterm elections in November 2018.

Coinbase Forms PAC

Politico correspondent Colin Wilhelm tweeted the news yesterday that the largest US-based cryptocurrency exchange platform had formed a PAC. The report was later confirmed via a Federal Election Commission (FEC) Filing made available to the public today — which shows that Coinbase had yet to raise any funds as of June 2018.

The purpose of a PAC is to raise funds for elections in the United States. Thus, it stands to reason that Coinbase is gearing up to support election candidates in the country ahead of the midterm Congressional elections in November. Supported candidates will presumably be pro-cryptocurrency.

Apart from forming a PAC, Coinbase has been active in the U.S. election campaign funding scene.

According to FEC financial disclosure documents, Coinbase contributed over $78,000 to Brian Forde’s campaign. Forde is running for the 45th Congressional district of California and was a former senior adviser in the Obama administration.

In 2014, the San Francisco-based cryptocurrency exchange platform also contributed $3,000 to Bit-PAC — often touted as being the first Bitcoin PAC to support cryptocurrency-friendly candidates.

Cryptocurrency and Washington

The cryptocurrency market has operated in a vacuum for most of its existence with many governments remaining ambivalent towards the emerging asset class. However, since the Silk Road crackdown, the U.S. government has increased its monitoring of the industry.

Additionally, 2017 saw the emergence of multimillion-dollar ICOs and 1000 percent cryptocurrency price surges. Congress appears to have become more interested in the market with regulators like the SEC and the IRS shinning brighter spotlights on the market. As a consequence of this, companies operating in the space know that it is essential to have adequate representation in Washington so that regulatory actions do not stifle the growth of the nascent industry.

Earlier in the year, Andreessen Horowitz formed a coalition to increase lobbying efforts in Washington. The goal was to ensure that the SEC doesn’t classify all cryptocurrencies as securities.

With Congressmen like Brad Sherman calling for a ban on Bitcoin mining, perhaps these cryptocurrency behemoths need to become more invested in candidates who can protect the industry from unnecessary government oversight.

What are your views on the Coinbase PAC? Let us know your thoughts in the comment section below.

The State Bank of Vietnam (SBV); the country’s central bank, has adopted the Finance Minister’s call for a prohibition on the importation of cryptocurrency mining rigs.

SBV Sides with MoF and MoIT

In June 2018, Vietnam’s Ministry of Finance (MoF) called for a ban on the importation of cryptocurrency mining rigs. The call came after Prime Minister Nguyen Xuan Phuc mandated state officials to develop stricter regulations for the market.

The MoF determined that cryptocurrency mining hardware, though not on the list of contraband materials, provided a means for people in the country to use virtual currencies as a secondary payment method. Considering that cryptocurrencies are illegal in Vietnam, the MoF sounded the call for a ban on crypto miner imports.

In addition to the MoF’s assessment, Deputy Prime Minister Trịnh Đình Dũng instructed the Ministry of Industry and Trade (MoIT), the SBV, and other government parastatals to examine the issues surrounding the importation of miners. The MoIT issued a letter to the SBV requesting its collaboration in researching the problem. The MoIT for its part recommended a temporary ban on mining rig imports.

Now, the central bank (SBV) has said that it agrees with both the MoF and MoIT. The SBV has called for a mining rig imports to be suspended. According to the country’s apex bank, such a move would enable the government to better manage the local currency market.

Protecting the Public from Cryptocurrency Scams

The general narrative in Vietnam is that virtual currencies provide a means for fraudulent elements to scam unsuspecting investors. Earlier in the year, news broke about a $658 million ICO scam by a Ho Chi Minh-based company, Modern Tech JSC. The fraudulent ICO purportedly affected more than 32,000 investors.

Thus, the government believes that it must do all it can to protect its citizens from future cryptocurrency-enabled scams. This protection requires the placement of a ban on the importation and use of cryptocurrency mining rigs.

In 2017, Vietnam imported about 10,000 mining rigs. Data from the country’s Customs shows that more than half that number was imported within the first four months of 2018. Saigon, Hanoi, and Da Nang are the principal mining hubs in Vietnam.

Do you think the ban on cryptocurrency miners will solve the problem of cryptocurrency scams in Vietnam? Let us know your thoughts in the comment section below.